All Forum Posts by: Account Closed

I'll second what @Cameron Skinner said that you should work with someone who specializes in real estate tax because there are many tax issues specific to real estate.

My best piece of advise is to treat it just like hiring any contractor. Make a time to speak with 4-5 CPAs and go with the one that you feel most comfortable working with.

Thanks Dave. I'll definitely do that!

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Originally posted by @Kerry Baird:

We have used an EA, or enrolled agent. This is an IRS certified tax expert, who can stand in your stead in the event that you are posted overseas and have to deal with an audit. We spent 16 years in England, where we couldn't just pop on over to an accountant. I highly recommend using an enrolled agent.

Thanks for responding Kerry! I'm not really familiar with enrolled agents so I'll certainly look into that option as well.

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Originally posted by @Cameron Skinner:

@Account Closed the tax code has just gotten so huge you can't just hire the guy down the street who tries to do everything. Always hire a licensed tax professional who specializes in real estate, someone with some letters behind their name not those franchise firms, and I would always prefer someone who owns investment real estate themselves. A good Accountant who works with you on planning and tax strategy will always save much more than you will ever pay in fees. Also always request a price up front. You might want to listen my interview on podcast #168, we touch on some tax planning topics, while I'm not taking on any new clients if you private message me I can give you some referrals.

Hope this help, Best of luck!

Thank you very much Cameron! I will certainly listen to the BP podcast you referenced and then follow up by messaging you.

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Hi BP!

I've searched the forums and blogs, but I didn't quite find what I was looking for. I'm currently in FL but will be purchasing a house and relocating to OH for work starting next month, January 2017. My husband is Active Duty Navy and we plan to purchase at least two MF investment properties in 2017 (one in Memphis, TN and one in Cincinnati, OH). I'm looking for recommendations on finding a tax professional to help with tax preparation services and tax strategy. Due to being a military family and in this day and age, I'm not sure how valuable local even is... Previously we've self prepared or just used software. However, this year is more complicated and with our investment goals for next year, it seems a great time to get a professional involved!

Thoughts, recommendations, advice? Thanks!

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Wow, thanks so much @Jacob Murphy for this awesome advice! I will certainly look into setting up these alerts and keeping your other tips in mind as well.

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Congrats Robin on finding a good deal with an owner open to creative financing options! I'm currently exploring seller financing as an option too, so I'm curious to see what responses and advice you receive on this thread.

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Originally posted by @William Walker:

Originally posted by @Ralph R.:

@William Walker so if someone puts a large enough down payment in the property to make it cash flow than your saying they have less risk? Sorry I can't see that either. The investor that is trying to use cash flow to reinvest will not grow very fast. The term cash flow is misleading in the first place. If you invest 30k in a property and the thing pays you back at 500 a month (pretty good cf.). It's still 5 years to get your 30k back. So in reality your not getting cash flow your getting your own money back at 500 a month. You still have all the risks you mentioned and if one occurs it jus prolongs the length of time to get your money back. If there is any inflation or the market goes up then that 30k won't buy as much house as it did the first time. Cash flow does nothing to lower risk. It's simply that. Cash flow. Due dillegance and proper management do lower risk. Vetting tenants, regular inspections looking for cap-x expenditures, pre purchase inspections also mitigate risk. A pro active maintenance program mitigates risk. Nobody controls the market but if your personal financial house is in order you set up some reserves for this. Relying on cash flow to cover these things won't be very successful RR

Let me ask you this in all seriousness. Would you 100% leverage a 2 door, million dollar property to get $50 a door? What about 2 million dollars? If there is no cut off for you personally as an investor, then stick with your plan of leveraging 100% for basically no cash flow. If you think, no, I wouldn't leverage that much, then what is your cutoff? And why would you not leverage that large of a property? Maybe we just have different financial reserves/stability and that's why we view this investment differently.

For me the answer is no, I wouldn't leverage that much for so little cash flow. And I wouldn't leverage 100% on either of the properties that are presented here. Maybe you would.

I'm sure some of the difference in investor styles and philosophies can simply be chalked up to varying preferences; however, I'd still like to understand. William, what criteria do you use when it comes to determining how much leverage you are comfortable with on a property? Also, what % do you usually aim for in cash flow compared to the amount of leverage?

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Originally posted by @Robert Arnold:

@Tiara Stewart-Cannon we are Cincinnati investors as well. Just bought a multi-family property there this month and it definitely has better returns than what you have listed so it is out there! We found great property management at 9% and interviewed 3 refereed companies. None were at 8%. Good luck!

Congrats on your new investment! How did you finance it, if you don't mind sharing? The main challenge is finding CF in a 100% leveraged property; however, I'm definitely determined to! I've certainly up'ed my percentage to 10% for PM to be on the safe side, thanks!

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Thank you very much @William Walker and @Ralph R.. Both of you have brought up many good points for me to keep in mind and for me to consider when analyzing every deal going forward! I definitely understand that being 100% leveraged is not ideal and it is not the plan going forward. I also appreciate the sentiment that I should not just go grabbing any ole' property just because it will be 100% financed; that is a very important piece of advice for me to keep forefront in my mind! I think another thing that influences this a bit is the house hacking part. I've found MUCH better CF deals in and around Cincy; however, not necessarily in areas I would feel comfortable living for a year...

Either way, you guys rock for giving so much feedback! Thanks!!

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Originally posted by @Ralph R.:

Tiara Stewart-Cannon Ok I didn't read every post on here but of the ones I read everybody seemed to overlook 1 thing. NO DOWN PMNT. Basically the first posters are telling you that you should pass up a free 50 dollars a month per unit or 100 dollars a month when both sides are rented. What's that going to be 5 years down the road as rents go up? And for free?? remember it's 0 down payment. What they are saying is correct if you laid 20% down payment out of your own pocket that would greatly reduce your payment and increase your CF. one investor gave you an ROI. I dunno where he got that number. Your investment is 0. The number is infinite. You want to remember it is extremely difficult to find a 100% leveraged property that will cash flow. I think you did very well to find 2 that would do it. I am assuming your numbers are all close to real numbers. RR

Though I am still new to RE, this is what I was thinking. If this is CF without a down payment, then as the principal is paid off over time and the rents either stay constant or increase, CF would increase. While I do understand that these were not slam dunk deals, I also am intent on utilizing the VA benefit and not putting a down payment. I am currently looking for better deals though, nonetheless! Thanks for joining in Ralph!

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All Forum Posts by: Account Closed

Account Closed has started 9 posts and replied 122 times.

Post: From Self Preparing to Hiring A Professional: Recommendations

Post: From Self Preparing to Hiring A Professional: Recommendations

Post: From Self Preparing to Hiring A Professional: Recommendations

Post: From Self Preparing to Hiring A Professional: Recommendations

Post: Duplex Analysis - Cincinnati, OH: 2 property options

Post: Master Lease or Seller finance with owner open to both

Post: Duplex Analysis - Cincinnati, OH: 2 property options

Post: Duplex Analysis - Cincinnati, OH: 2 property options

Post: Duplex Analysis - Cincinnati, OH: 2 property options

Post: Duplex Analysis - Cincinnati, OH: 2 property options